Calculate the implementation shortfall

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On Wednesday, the stock closes at $50 a share. On Thursday morning before the market opens, the portfolio manager decides to buy some shares and makes a limit order for 1,000 at $49.95/share. The order expires unfilled. The stock closes at $50.05. The order is revised on Friday to a limit of $50.07. This is partially filled that day as 700 shares are bought at $50.07. The commission is $23.00. The stock closes at $50.09 and the order is canceled.

Required:

Calculate the implementation shortfall in (USD) and the following components: explicit cost, delay or slippage cost, missed trade opportunity cost, and the realized profit

Reference no: EM133061920

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